Milwaukee-based payroll and employee benefits startup zizzl LLChas raised $3.1 million in equity, according to a filing with the Securities and Exchange Commission.
Raymond Seaver, Jr., zizzl founder and chief executive officer, said that funding will primarily support the startup’s expansion nationwide.
“We were focused on Wisconsin two years ago but now we have more of a national focus,” said Seaver. “We’ve turned our attention to marketing and we’ve gone from more of a direct-to-business model to distributing through employee benefit brokers.”
A majority of the $3.1 million will go toward educating employee benefit brokers, according to Seaver.
zizzl’s health care benefits platform is based on a form of Health Reimbursement Arrangement (HRA) called Individual Coverage HRA or ICHRA, which became available in the health insurance marketplace in January 2020 following a presidential executive order.
ICHRA, pronounced “ick-rah,” uses a model based on reimbursing employees for insurance rather than buying it for them. Employers can design the company’s plan by establishing reimbursement limits and also define which employees are eligible.
Employees purchase the individual plan they want and receive reimbursement from their employer for a portion or all of the premium, depending on the cost and how much their employer is contributing, along other valid claims they submit.
However, even though employees are purchasing an individual health plan, employers still get the pre-tax savings of a group plan.
To attract more clients, the startup launched its own technology platform last year and is no longer relying on a third party. Before launching its own platform, the startup could only provide services to businesses with fewer than 100 employees.
“It (the platform) gives us the ability to accommodate larger employers that have a distributed workforce across many states,” said Seaver.
zizzl has grown from 14 employees in 2020 to 25. Seaver has always had plans to expand the zizzl health program nationally. He previously told BizTimes Media he hopes zizzl will grow to 500 employees.